Monday April 20, 07:42 PM
Britain's GSK buys US skincare firm Stiefel
By Roland Jackson
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LONDON (AFP) - British drugs firm GlaxoSmithKline (GSK) said Monday it will buy Stiefel Laboratories, US maker of anti-itching creams, acne treatments and other skincare products, for as much as 3.6 billion dollars.
The deal for Stiefel, worth the equivalent of 2.7 billion euros, had been expected after US media reports over the weekend.
"GSK and Stiefel Laboratories today announced that they have signed an agreement to create a new world-leading specialist dermatology business," the pair said in a joint statement.
"Under the terms of the agreement GSK will acquire the total share capital of Stiefel for a cash consideration of 2.9 billion dollars.
"GSK also expects to assume 0.4 billion dollars of net debt upon closing. A potential further 0.3 billion dollars cash payment is contingent on future performance."
Stiefel is part-owned by US buyout firm Blackstone Group and was put up for sale earlier this year.
"This transaction will create a new world-leading, specialist dermatology business and re-energise our existing dermatology products," said GSK Chief Executive Andrew Witty in the statement.
"The addition of Stiefel's broad portfolio will provide immediate new revenue flows to GSK with significant opportunities to enhance growth through leveraging our existing global commercial infrastructure and manufacturing capability."
Witty said the bolt-on acquisition was part of GSK's strategy to grow and diversify its business.
In late afternoon London trade, GlaxoSmithKline shares were up 0.72 percent at 1,045.50 pence, while the overall market was down 2.23 percent.
Analysts were generally positive on the deal with Jonathan Jackson, head of equities at Killik & Co, saying it "represents a further step in the group's previously-announced strategy to grow and diversify its business.
"It provides immediate new revenue and synergy opportunities," Jackson said, adding that his house was a buyer of the stock which has fallen 19 percent so far this year.
Stiefel Laboratories has been controlled by the founding Stiefel family for more than 160 years. Blackstone spent 500 million dollars on a large minority stake in the company in 2007.
"The combination of Stiefel and GSK will create a leading company in global dermatology with a strong presence in the prescription, consumer and aesthetic skin health markets," said Charles W. Stiefel, chairman and chief executive officer of Stiefel.
"Along with adding hundreds of marketed dermatology products, this deal will increase the value of Stiefel's unparalleled dermatology pipeline by expanding the customer base to which we will be able to offer these products."
The deal is the latest in a series of takeovers among large pharmaceutical companies increasingly under pressure from rivals who make generic treatments, those which no longer have patent protection.
Last week, GSK and Pfizer, two of the world's largest pharmaceutical groups, announced a plan to combine their HIV drugs businesses into a new company.
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